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SOC GEN USD/JPY view: The USD/JPY........>

DOLLAR-YEN
DOLLAR-YEN: SOC GEN USD/JPY view: The USD/JPY chart is fluctuating between two
converging lines at 115.50/116.00 and 107.50/106.50 which could potentially be
forming a triangle pattern. This fits our concern that we're unlikely to return
to the 2015 highs. A higher USD/JPY relies on US TIPS yields breaking free; we
think a test of December's peak is possible but a break higher is unlikely. It's
also increasingly apparent that yen bears can't rely on a risk-friendly backdrop
alone to help them, given unhelpful cross-currency basis spreads: see. We're
happy with long USD/JPY during the current rising trend in TIPS yields but we've
lost almost all hope of seeing 120 again and there's a long-term danger of a
move lower, towards PPP-consistent levels closer to 100.

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